How would you feel as a musician and as a creator today as you hear and read about all of these board room deals taking place between technology companies and the record labels?
Millions upon millions are exchanged from a technological company to the record labels.
Because if a technological company wants to offer a music service they need to license the music catalogue that the record labels hold. And the music catalogue that the record labels hold is music created by artists, songwriters and producers, including those same artists that are supporting the PRE-1972 RESPECT ACT. So where is the windfall for the artists from all of these backroom deals. In a nutshell it is their music that the record labels are using as leverage.
The RESPECT ACT says that some of the biggest digital radio services in the world have decided to stop paying royalties to artists who recorded music before February 15, 1972. It looks like the record labels never paid any royalties to these artists.
The Allman Brothers have sued Universal Music and Sony Music for unpaid iTunes royalties. The Temptations sued Universal for not paying iTunes royalties properly. The Beatles sued EMI over unpaid royalties. Martha Reeves sued Motown for unpaid royalties. Roger McGuinn, from the Byrds, has never received royalties (beyond a “modest advance”) for the 15 albums he recorded with the band.
The RESPECT ACT says these companies believe that they can use pre-1972 recordings for free, forever. It looks like the record labels use these pre-1972 recordings to negotiate licensing deals, without any compensation to the original artists and the writers.
The RESPECT ACT says that while the artists of today are paid royalties every time their songs are played, the inspirational artists who came before them — Motown acts, the legends of Jazz and Blues, and the musicians who gave birth to Rock n’ Roll — all get nothing. Um, those acts never got nothing in the first place from the record labels. Modest advances maybe.
The RESPECT Act states that the decision by these companies to cut oﬀ royalties for pre-1972 recordings caused artists and record labels to lose an estimated $60 million in royalties. Music is how artists pay the rent, provide for their family, and plan for the future.
Um, what about the estimated millions of royalties that the artists have lost due to creative record label accounting.
And what about all of the producers and songwriters that worked on those music catalogues that the record labels now own and use as a bargaining chip. Based on all of the research funded by the RIAA, producers and songwriters are the ones that are hurt the most because of piracy. It looks like they are really hurt by the streaming licensing deals.
Seriously think about it.
SPOTIFY had to pay a hefty license fee to operate and in the US they had to give up half the company.
BEATS also had to pay a license to the record labels and give up some equity.
APPLE also paid the labels to license their music.
GOOGLE, AMAZON and PANDORA also have paid the labels. The list just goes on.
Some could argue that the artists, producers and songwriters got paid a decent advance for their music. And the norm in the past has been to give the songwriters and the producers a modest advance for their work in exchange for any future royalties earned. But at that time when the advance is paid no one knows how big that potential song or album could be. Or vice versa, no one knows how bad that song or album could be. But if the song or album does blow up, it doesn’t mean that the producer or the songwriter will start getting some decent royalties.
Because then the maths start to get more complicated due to that record label black hole formula known as RECOUPED. When that formula starts to be applied to any money earned from royalties there is a 99.9% chance that the artists will not receive a cent.